Analysis and Reflection on Shareholders Priority Essay

2075 Words Jun 16th, 2016 9 Pages
Analysis and Reflection on Shareholders Priority
When it comes to corporate governance, there is an important topic worthy of discussion, that is, which should be given priority to between shareholders and stakeholders. Enterprises based on different market, cultural, economic and other elements in all countries give a different answer from both in theory and practice. This essay will briefly review the two main points of view and arguments. Then, according to the requirements of the distribution of issue, it will analysis the reason why Anglo Corporations must focus on shareholders, and discuss the characteristics and influence of the management mode with the priority of shareholders. Finally, this paper attempts to evaluate the above
…show more content…
Logical connotation of this theory is that shareholders establish the company with money, elect the board of directors and hire managers and employees. The power of the company comes from the original property of shareholders. Corporate governance works through allocation of various resources of the company. As an investor in the capital of the material capital, the shareholders are the real risk takers of the enterprise. In addition, the relationship between shareholders and other stakeholders is mutual checks and balances, so there is a quality of inevitability in shareholders priority. In the industrial economy era, the main factors of production are land, labor and capital, and the knowledge resources are only in a subordinate position. So other stakeholders have to abandon the requirements of enterprise ownership temporarily and become fixed income earners.
1.2 Stakeholders Priority
With the development of the society and the change of the company, the management idea of "shareholder priority " has been criticized more and more. On the contrary, governance concept of "stakeholder priority " is increasingly popular among scholars and leaders. This governance model believes that the company is composed of shareholders, creditors, employees, suppliers and other stakeholders. The interest relationship among them is equal, shareholders are just one of them like others. Managers

Related Documents